Battery Stocks Aligning with LG Energy Solution's Hype Expectations

SK Innovation rises over 10% during LG Energy Solution demand forecast
Samsung SDI also surges over 5%
Expectations rise for LG Energy Solution's market cap to reach 100 trillion won

[Asia Economy Reporter Minwoo Lee] As LG Energy Solution is expected to surpass a market capitalization of 100 trillion won after its listing, the stock prices of its competitors are also fluctuating. Given the unprecedented level of interest and the anticipated market cap size, there is an expectation that the corporate values of other secondary battery manufacturers will also be "matched up."

According to the Korea Exchange on the 14th, SK Innovation's stock price rose to 272,500 won intraday the previous day, marking its highest level since July 15 last year. From the 11th to the previous day, the closing price increased by 10.4%. This surge occurred despite forecasts that the fourth-quarter earnings of last year would somewhat fall short of expectations.

This period coincided with LG Energy Solution's demand forecast for institutional investors. At that time, the order amount exceeded 100 trillion won for the first time ever, attracting unprecedented interest from institutional investors. The public offering price is also expected to be at the top end of the desired range, 300,000 won, projecting a market capitalization exceeding 70 trillion won upon entering the stock market. Samsung Securities and others anticipate the market cap could increase up to 122 trillion won. As LG Energy Solution expands its scale, it is interpreted that the corporate value of SK Innovation, a competitor in the same industry, is also expected to be re-evaluated.

In fact, SK Innovation's refining division in the fourth quarter of last year is expected to see profit growth due to improved refining margins and rising oil prices, but the secondary battery division is projected to widen its losses compared to the previous quarter due to upfront costs related to the initial operation of its US Plant 1. Hyuntae Kim, a researcher at BNK Investment & Securities, explained, "Despite this, SK On, SK Innovation's battery business unit, had a battery order backlog of 1.6 terawatt-hours (TWh) as of the end of last year, which is not much different from LG Energy Solution." He added, "Considering differences in production capacity and profitability, SK On alone can be valued at a minimum of 20 trillion won." Given that SK Innovation's market cap was in the 24 trillion won range based on the previous day's closing price, there is ample room for further increase.

Samsung SDI also showed a similar trend. On the last day of LG Energy Solution's demand forecast, the 12th, its stock price closed up 5.10%, achieving the largest single-day gain since April 13 last year (which saw a 5.34% increase). The emergence of LG Energy Solution is raising expectations by boosting the valuations not only of secondary battery material and equipment suppliers but also of competitors.

This content was produced with the assistance of AI translation services.